We have shown that a full length cDNA sequence of bovine beta1- 4galactosyltransferase, engineered in an Okayama-Berg expression vector, upon transfection of COS-7 cells coded for a functionally active beta1-- 4galactosyltransferase protein. The 402 residue-long protein that is expressed in the COS-7 cells has amino-terminal membrane-anchoring domain and the binding sites for UDP-galactose, N-acetylglucosamine, glucose and alpha-lactalbumin that are all intact and operative. The activity of the expressed protein is modulated by alpha-lactalbumin to change the acceptor specificity to glucose, to synthesize lactose. In the present studies deletion constructs were prepared that would code for the proteins that lacked the amino-terminal membrane-anchoring domain and up to first 70 residues of the protein equivalent to the secreted form of the enzymatically active protein. Deletion constructs, engineered in Okayama-Berg vector, upon transfection of COS-7 cells do not produce enzymatically active protein. On the other hand, when expressed in E. coli, the short form of the protein, that has first 70 amino-terminal residues deleted, is enzymatically active. The results of the amino-terminal deletion constructs suggest that the beta1-4galactosyltransferase without a missing membrane-anchoring domain when expressed within a mammalian cell is either unstable or inactivated. The role of the membrane-anchoring domain in the mammalian cells may be to target the protein to a proper site there by either preventing it from inactivation or enhancing its stability. Comparison of the sequences of Ca2+-binding loop of alpha-lactalbumin with the corresponding sequences in c-type Ca2+-binding and non-binding lysozymes show that certain conserved residues which are not directly liganded to Ca2+ may contribute to the binding of Ca2+ ion.